We suspected austerity was going to be bad, but we didn't know how bad. Now, as services are withdrawn and benefit changes come into force, we are beginning to find out. Camden council in north London this week published research, carried out with the Young Foundation, that attempts to get beyond the conventional scary-numbers-and-graphs-of-doom analysis of the shrinking state. Researchers interviewed more than 70 vulnerable people living in the borough, focusing on three groups: disabled residents and carers; young people; and families on low incomes.

The findings will be familiar to anyone who has followed the Guardian's Breadline Britain series: the combination of soaring living costs (particularly food and childcare), welfare cuts, and charges for previously free services (such as homework clubs) have put people in all three groups under immense, and in some cases, almost intolerable pressure.

A disturbing theme to emerge was the prevalence of fear and uncertainty. Words such as "isolation," and "loneliness" recur, especially in relation to families with children aged under five, and disabled people "trapped" at home by cuts. The threat of being uprooted from the borough (which has the fourth highest private sector housing rents in the UK) by housing benefit caps provoked terror.

Researchers noticed "palpable tensions" and "more arguments" within families. Residents spoke of reaching "their tipping point". Some perceived a related increase in domestic violence. Anxiety levels were high, and there was "an air of panic" and despair when residents spoke about the future.

Carers were increasingly bearing the burden of benefit cuts imposed on the people they care for, both financially and in terms of their time. Researchers found many carers on the "edge" of mental illness. The Young Foundation's Vicki Sellick paraphrased a common carer response this way: "I'm not sure I can do another day like yesterday."

Amid the despair, there was some optimism. Researchers found high levels of resilience. Many people were determined to improvise and cope. Grassroots solutions appeared: for example, a support group for parents with learning disabled children, threatened with closure, was taken over, without council funding, by the parents. Researchers noticed "a subtle shift" in how some communities were "taking more care of one another".

So far, so "big society". But austerity measures were already corroding this nascent neighbourliness. Benefit caps and rent rises were forcing people to move far from established family and friend networks, obliterating a core part of their coping strategy.

Amid the stoicism came unhealthy personal sacrifice: the low-income mum who ate once a day and never on Saturdays to ensure her kids get a decent meal, for example; and the indignity of "just coping" – more than one interviewee reported "people fighting for the discounted vegetables" in the supermarket.

As Naomi Eisenstadt, the former director of the government's social exclusion taskforce, said discussing the Camden findings: "Community resilience is great, but I'd rather have the tenner in my pocket."

These residents' political response to the cuts will be interesting. The study suggests that the closer cuts come to home, the more that support for austerity wavers. Young people, it noted, feel "angry and victimised". Some interviewees worried about a repeat of last summer's riots. Others just felt helpless.

The reckoning process has only just begun. Many Camden residents did not yet fully understand the impact of the cuts, or that more austerity awaits. But few expect things to improve.